Last month, I attended the International Association of Outsourcing Professionals (IAOP) Outourcing World Summit in Phoenix, Arizona. I had the chance to glean fresh insights from industry-leading practitioners and get a global view from sourcing executives.

Though there has been an evolution in the outsourcing industry, one thing has not changed: outsourcing is a winning strategy. In the recent study from IAOP & Information Services Group (ISG) Annual State of the Industry1 presented at the event, it stated that “Multi-sourcing as an outsourcing approach increased by 75% from last year’s percentage”. The predictions for 2015 also show continued growth: “51 percent of respondents in the survey said they expect to pursue more outsourcing opportunities during the year”.2

Multi-sourcing - where a customer uses several service providers to provide a single scope of outsourced services, is nowthe new norm in outsourcing. In today’s organizations, outsourcing is increasing and each additional outsourcing agreement makes it more difficult to holistically manage IT service & support.

A new way of thinking about SLA’s is required to make multi-sourcing effective

Service-level agreement (SLA) management is the process of negotiating, defining and managing the levels of IT service. SLA management is a key challenge that organizations face as part of outsourcing and it is becoming increasingly difficult with multi-sourcing.

Most organizations invest heavily to define SLAs. If you talk to the service tower owners themselves, fewer than half have know what SLA’s are actually in the contract. They also cannot recall all of the specific details that the increasing numbers of the agreements contain. So, there is a lot of work that goes into developing these structures but there is no framework established on how to govern them in an automated way.

As a result, most SLA management is reactive. Periodic reviews between buyer and vendors are based on summary performance data from the prior period. Data from vendors is typically inconsistent and inaccurate. I was speaking with a sourcing executive at a large financial services company a couple of months ago, and she reported that half of the meeting time spent with vendors on performance was used just to agree on what an accurate view of the data was. This hardly aligns to the dynamic nature of business today.

New Paradigm on Thinking about SLA’s

Imagine the ability to manage SLA’s with each of your providers in real-time with one service integration framework. In a workshop we held in New York with a number of large buyers and providers late last year, they highlighted that this would not only move the service management model from reactive to proactive, but would also enable a more collaborative working model – moving away from the “us vs. them” paradigm. In one multi-sourced organization we’ve implemented this model in, it has completely eliminated after-hours escalation calls and dramatically reduced resolution times. With an active SLA capability you can manage all of the multi-sourcing relationships from one “pane of glass” and get accurate service information in real-time, such as:

Overview of all your open cases per provider

Cases trending towards SLA violation that you can proactively take action on

Actual violations that require immediate attention

To be effective, this solution would need to be very easy to consume, showing only what really matters up front. Front-line managers don’t have time to browse hundreds of tickets when only looking for one affecting the SLA. This all sound promising but is it possible to achieve?

Transforming multi-sourcing with active SLA’s

We are pleased to announce the availability of Active SLA Management in the 7.0 release of Cisco ServiceGrid. With a highly innovative user experiences via a centralized dashboard and reporting capability for the connected multi-sourced ecosystem, you will gain real-time visibility & drill-down functionality for events trending toward or violating SLAs to enable a more proactive, end-to-end vendor management capability.

The acronym SIAM stands for Service Integration And Management, and it is a hot topic in the world of IT Service Management…..but why? Service integration models have been around awhile, but are evolving from the challenges of managing a small number of large service partners to a model of managing a larger number of smaller partners. As the services and businesses become more critical or complex, the level of service integration becomes deeper. SIAM builds on the ITIL framework, and expands it.

What is SIAM?

According to Wikipedia: “Service integration and management (SIAM) is a framework for managing multiple suppliers of information technology services and integrating them to provide a single business-facing IT organization.”More…

The UK Government defines it as “Service integration and management lets an organization manage it’s service providers in a consistent and efficient way, making sure thatperformance across a portfolio of multi-sourced goods and services meets user needs.”More…

Kevin Holland, ITIL expert is a bit more specific “Service Integration and Management(SIAM) is both a model and a function which provides a single point of accountability for the service management and delivery of all services provided by internal and external service providers, by taking responsibility for and assuring suppliers performance , coordinating delivery, integration , and interoperability across multiple providers, and providing the necessary governance on behalf of the users.”Details…

Essentially, it is about keeping (or recovering) control – IT organizations use more and more external support providers today, and managing these relationships is getting more complex. SIAM might be the answer to this challenge, because it is all about how IT will deliver the capability to achieve end-to-end service excellence in an increasingly complicated environment by actively managing all aspects of service performance. Basically, it supports businesses by helping them get the most out of their outsourced and externally managed services.

Why is SIAM important now?

SIAM is in the spotlight of the key analyst groups, Forrester and Gartner. Spending on external and internal IT services is higher than ever; However, according to Gartner’s 2014 key metrics survey, only 11% of respondents say that they have mastered their approach to sourcing, and 89% need to improve competencies and significantly raise their maturity levels in order to manage multi-sourcing successfully. (Source) These metrics show large future potential for SIAM.

If you decide to research SIAM further, keep in mind that SIAM is sometimes referred to as MSI (Multi-sourcing Service Integration)

Are you using or considering a SIAM framework? I would love to hear your thoughts.

Cisco IT is transforming itself to deliver IT As A Service (ITAAS), and this is changing the way we deliver all IT services internally, including our unified communications (UC) and video services. For the business, we offer transparent IT cost information and (over time) cost reduction, as well as the ability to re-use service components for faster delivery of new services. For our employees, we are making the processes for ordering and provisioning IT services fast, automated, simple, and consistent. This goal is particularly important for our UC and video services, which provide essential voice and video communications tools for our employees. Read More »

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